Ebix – The Taxman Cometh

DECEMBER 13, 2018 – Ebix’s Mumbai office was “searched” by Indian tax authorities in Q3 2018. In other news, CEO Robin Raina claims Ebix has never “been on the wrong side of any regulatory or tax authority”.

Viceroy released its preliminary report on Ebix – titled Goodwill Hunting – on 11 December 2017, the contents of which we also discussed at the Kase Learning conference in New York on December 3, 2018.

This report will address the totally inadequate response Ebix issued on December 12, 2018, which was substantially an attempt at authority bias by CEO Robin Raina. Accordingly, we will also shine a light on the statements Raina decided to include in this press release, which we believe to be extremely misleading.

Ebix acknowledged our report via a press release on December 12, 2018, however CEO Raina would rather issue a hollow press release than address the issues Viceroy have raised in our preceding report.

Robin Raina claims Ebix has “never been on the wrong side of any regulatory or tax authority”. This is inconsistent with:

Ebix’s Mumbai office being subject to an undisclosed “search” by Indian Tax Authorities for suspicion of tax evasion in late August 2018;

Ebix currently subject to a tax audit by the Australian Taxation office since at least 2016;

Ebix historically settling an IRS dispute for >$20m;

Ebix being subjected to a prolonged SEC investigation;

Ebix being subject to a possible ongoing DOJ investigation;

Contrary to Raina’s claims, it appears his conduct was subject to regulatory scrutiny even prior to his rise to CEO. Ebix’s former auditor, Arthur Anderson, was charged by the SEC for improper conduct and fraud relating to the audit of Ebix’s revenue recognition practices at a time where Raina was VP of Sales and Marketing and COO.

Robin Raina claims Ebix has had “no differences with any statutory or consolidated auditors across the world in the last two decades”. This is objectively, and verifiably false, as we have already reported.

Ebix detracts attention to concerns raised through reinforcement of its commitment to stock buybacks, of which it has announced US$330m since 2015 and only fulfilled US$187.169m.

Viceroy is writing to the relevant debt providers shortly with these and other material concerns.